Time to Invest in Business DevelopmentBy Lawrence Walsh | Posted 2008-10-31 Email Print
Re-Thinking HR: What Every CIO Needs to Know About Tomorrow's Workforce
Vendors are beginning to grow intolerant of partners that are too dependent for marketing, tech and sales support. Solution providers that don’t learn to fish may find themselves knocked out of the stream entirely.
Walking down the street of Bellevue, Washington, the other night, I overheard the conversation of four middle-aged men who were obviously in the technology business (blue shirts, khaki pants). The topic of their evening stroll: partner expectations.
The most senior member of this quadruplet was bemoaning how he keeps getting calls from solution provider partners wanting to get access to his accounts and relationships to strike up new business. The only problem, in this man’s eyes, is all the new business was for the solution providers and not him.
"I tell them that they can talk to my accounts, but they need to come to the table with something and get something going, and then I’ll come in," he told his colleagues.
Surprised? You shouldn’t be. There is a growing perception among vendors – particularly on the direct sales side of the house – that the channel is a parasite rather than a partner. While the channel is an extension of sales and services that vendors simply can’t scale, a growing chorus like those men on the street in Bellevue believes solution providers are more of a necessary evil.
When talking with one channel chief about doing enhanced lead generation for solution providers that the vendor would pay for, the response was both chilling and dismissive. It went something like this: "So let me get this straight – they want me to train them, supply them, give them incentives, discount my products, provide technical and sales support, all the marketing materials, send sales engineers on calls and give them the leads? What’s left for them to do?"
The channel is neither a necessary evil nor a parasite. Solution providers are the backbone of the technology ecosystem and owners of the relationships with the customer (the end user). It’s the solution provider that aggregates and integrates all of the vendor technologies into holistic systems that satisfy customers’ needs. The "value" in "value-added reseller" didn’t come alone from the aftermarket services that came with product sales, but rather it also meant what the solution provider did with the standalone products to make them market-worthy.
Until recently, every solution provider I spoke with recited the same speech: business is busier than ever and no signs of slow down. That’s beginning to change as the credit crunch and economic slowdown is seeping into the midmarket—the bread and butter customers of the average solution providers. Customers are delaying or recasting projects as they adjust spending to both conserve cash and maintain profitability.
Many vendors and solution providers saw the path to wellness through expansion of their footprints with existing customers. Now that the downturn is affecting everyone, the only way to maintain viability is capturing net-new customers and engagements. Unfortunately, many solution providers are looking to their vendors for fresh leads or access to accounts. It’s the wrong answer. Vendors are doing lead generation for their partners, but the reality is that they want and expect solution providers to find and land new accounts.
The marketing done by vendors large and small is intended to provide air cover; when solution provider go into a new account talking about switches and servers, the customer will know the brand even if they don’t know the solution provider. Many vendors know that this pull-marketing will entice customers to ask for their products by name, making it easier for solution providers to sell bundled packages and increasing their yields per engagement. In those situations, everyone wins.
Vendors want hunter-gatherers that domesticate themselves into account nurturers. Vendors will provide the most support and incentive to those who bring new business into their ranks rather than those who are reliant on vendors for business and sales development. As the economy tightens, vendors will begin to bypass solution providers—and perhaps the channel entirely—that exhibit too many dependencies. Their attitude: If we’re going to do the heavy lifting, we might as well get the rewards.
Now is the time for solution providers to step out of their comfort zones and invest in business development, marketing and sales. Solution providers that make a business plan and apply resources beyond tech muscle will win the loyalty of their vendors and customers, and likely find sustainable growth even through this rough patch.
Lawrence M. Walsh is vice president and group publisher of Channel Insider. He can be reached at firstname.lastname@example.org.